Parvinder Singh Taneja vs DCIT

Shri Parvinder Singh Taneja, A.V. 2019-20 Appeal No.: CIT (A), Delhi- 27/10956/2018-19

unaccounted money was routed back from his father-in-law in the form of gifts. On the basis of the alleged inferences, the AO has made the addition of Rs. 89,50,000/- u/s 69A of the Act.

4.2

I have considered the submissions of the appellant. I find that the addition has been made by the AO on the basis of some WhatsApp chats found between the appellant and his father-in-law Sh. Prabhjot Singh Kohli which showed that the appellant was making some cash payments to Sh. Prabhjot Singh Kohli and in return, he was making payment in form of gifts back to the appellant Further, in his statement recorded u/s 132(4) of the Income-tax Act, 1961 on 31.10.2022, the appellant confessed that he used to send cash to his father in law and the same was earned on account of various immovable property transactions undertaken by him. This confession of the appellant was in respect of those cash payments made to his father-in-law which were reflected in the Whatsapp chats. On the basis of the said evidences, in the impugned financial year, the AO has inferred that the appellant was generating unaccounted money through property transactions, selling out of the luxury watches in grey market and through undisclosed commission income which was routed back from his father-in-law in the form of gifts and sought to treat the entire receipts of Rs.89,50,000 received by the appellant from his father in law in its bank account as unexplained money under section 69A of the Act.

4.3

In the present case, I find that the evidences found from the WhatsApp chats of the appellant with his father-in-law showed that on several instances, cash was being paid by the appellant to his father-in-law which was received in return by the appellant through banking channels. The same also stands admitted by the appellant in his statement that he used to send cash to his father-in-law and receive gifts of same amount through banking channels. However, I also find that the evidences found in respect of cash payments made to father-in-law by the appellant were only in respect of some specific receipts and not in respect of all the credits which were received by the appellant from his father-in-law and mother in law.

Shri Parvinder Singh Taneja, A.Y. 2019-20 Appeal No.: CIT (A), Delhi- 27/10956/2018-19

4.4

Before coming to the discussion regarding the evidence found pertaining to cash payments made by the appellant to his father in law, I refer to the provisions of section 69A of the Act to examine whether the credits received in the bank account of the appellant could be taxed under section 69A or not. In this regard, the provisions of section 69A of the Act reads as under:

"Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year."

In the above section, it can be noted that that the addition under section 69A of the Act can be made only if the following precedent conditions exist:

(i)

Ownership: The assessee must be found to be the owner of the money, bullion, jewellery, or other valuable article during the relevant financial year. Ownership here is not about mere possession; it means having full rights over the asset, such as the right to possess, enjoy, transfer, or use the asset for one's own benefit. The Supreme Court has clarified that mere possession does not amount to ownership if the person does not have legal rights over the asset. For example, a thief or a carrier of goods is not considered the owner under this section;

(ii)

Not Recorded in Books: The asset must not be recorded in the books of account maintained by the assessee. If the asset is already accounted for, Section 69A cannot be applied;

(iii)

Unsatisfactory Explanation: The assessee must either offer no explanation or an explanation that is not satisfactory to the Assessing Officer regarding the nature and source of the asset. The explanation must be credible and supported by evidence; otherwise, the addition can be made.

'Section 69 and Section 69A, apart from being close neighbours, do bear resemblance with one another. Section 69 deals with unexplained investment. Section 69A deals with unexplained money, bullion, jewellery or other valuable articles. Section 69A was inserted by Amending Act 5 of 1964 and it came into effect w.e.f. 1-4-1964. Both sections require that the subject matter of the provisions, viz., investments in the case of section 69 and money, bullion, jewellery or other valuable articles in the case of section 69A are not recorded in the Books of Account. That is, in a case where Books of Accounts are maintained. In the case of investments under section 69, necessarily, the Law-Giver contemplates the Assessing Officer finding that the assessee had made the investments. In the case of section 69A, the assessee must be found to be the owner of the money, bullion, jewellery or other valuable articles. In both cases, if the assessee is able to offer an explanation for the nature and the source for the investments and money, bullion, jewellery or other valuable articles, respectively, and it is not found unsatisfactory, there can be no deemed income under either section.'

'37. This Court has again examined the evidence in some detail. There are certain facts that stand out which showed that the aforementioned amounts received by the Assessee as POs did not belong to him. The Assessee was only a conduit through whom the amounts were floated. One of the essential conditions in Section 69A of the Act is that the Assessee should be the "owner of the money" and it should not be recorded in his books of accounts. This was a pre-condition to the next step of the Assessee offering no explanation about the nature and source of the acquisition of such money."

“8.

The primary condition of invoking section 69A for the purpose of making additions of the value of jewellery, bullion, or other valuable articles or money 'of which the assessee is found to be the owner of any of these articles' and not recorded in the books of account, as income from undisclosed sources. Apparently, the condition precedent for invoking section 69A is the finding that the assessee is found to be the owner of any bullion, jewellery or other valuable articles. No presumption of ownership has been raised statutorily in favour of revenue and against the assessee, nor there is any warrant to invoke section 69A merely on the basis of assessee's possession. On his disclaimer that such articles found in his possession do not belong to him, the burden lies on the revenue to establish the ownership of the assessee before raising any presumption against him.

9.

So far as the finding that the money and valuable articles are owned by the assessee is concerned, the burden is squarely on the revenue because it is only on reaching such finding the opinion that can be given about the source of its acquisition. It is only on establishment of ownership of such articles either on admission of the assessee or otherwise if assessee fails to explain satisfactorily the source of acquisition of such valuables that section 69A can be invoked for making additions into the total income of the assessee value of such articles as income from undisclosed sources for the assessment year relevant to previous year during which the assessee is found to be owner of such valuable articles. Therefore, the burden of proving ownership of the assessee in valuables found in possession of the assessee rests on the revenue and not with the assessee. What amount of evidence to establish ownership would depend on facts and circumstances of each case. In the present case, the Assessing Officer has started with the presumption of ownership merely on the basis that the assessee was found in possession of the aforesaid primary gold and gold ornaments by customs authority apprehending the possession of the assessee in breach of provisions of Gold Control Act. However, with clear finding reached by the CEGAT, which was though not binding but was relevant material to go into consideration, the assessee has displaced the presumption about ownership arising from mere possession of the primary gold and gold ornaments on 14-10-1987. Therefore, the ultimate burden rested with the Assessing Officer to reach a finding about the ownership of such valuables vesting in the assessee with some material having nexus with the finding of such ownership... ... ...

10.

The logic that because the gold ornaments are not proved by three persons as belonging to them though it was admitted by each one of them that the attributed gold ornaments and primary gold derived from such ornaments belong to them respectively it belongs to the assessee suffers from legal lacuna. The finding cannot be considered to be a finding of fact which binds the appellate Court. The findings of tax authorities stand vitiated not only by a wrong view of burden in appreciating the evidence but having no nexus between the finding about the failure of Serve Shree Bhopal Singh, Om Prakash Gupta and Gauri Shanker Singhal to prove the ownership of the gold ornaments which they admit to have delivered to the respective goldsmiths through the assessee, Mangilal Agarwal, for the purpose of making new ornaments as a piece of evidence to establish the ownership of the assessee. It is this failure on the part of the Assessing Officer and subsequently affirmation of that finding without considering the vital aspect of the applicability of section 69A, it remains a finding with no material on the basis of which any finding could be reached that the assessee was owner of the primary gold and the gold ornaments found in his possession by the customs authority, which the assessee claimed to have received in the manner stated above, namely, from Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal who brought the gold ornaments and delivered to him for the purpose of making new ornaments and the primary gold found in possession of assessee was released from confiscation only on a clear finding that such primary gold belong to the abovenamed three persons. The said persons had admitted their ownership in income-tax proceedings also. The three persons' existence is not in doubt. Their affidavits have been brought on record. The fact that because the ornaments were brought by these three persons, the assessee has described them as owners of the gold cannot be held against the assessee to hold him to prove the ownership. If these persons had not stated correctly about the ownership of the gold ornaments brought to assessee by them it cannot be evidence of the ownership of the assessee over the primary gold and gold ornaments found in his possession on 4-10-1987 brought by said three persons to the assessee. There is nothing to rebut the statements of said three persons brought different weight of gold ornaments to the assessee for remaking the new ornaments. Thus, the finding recorded by the IT authorities remains a finding on a wrong view of the burden of proof, by erroneous reading of the requirement of section 69A for the purpose of making additions of the value of the primary gold and gold ornaments in the hands of assessee in whose possession the same were found and by recording finding about the ownership of the assessee without any material but merely presuming him to be owner because Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal have failed to prove their ownership, notwithstanding they are admitting that they brought the said gold to the assessee for making new ornaments, against which statement there is no evidence. Such persons claim ownership of such ornaments also.

11.

It may also be noticed here that section 69A cannot be invoked merely on the basis that a person is found in possession of any valuable article but it is only on his being further found to be the owner of such money, bullion, jewellery, or other valuable articles that section 69A can be invoked for raising presumption. This basic link is missing through the proceedings resulting the Tribunal affirming the orders of the CIT(A) and the Assessing Officer cannot be sustained.

16.

We have noticed above that the finding in each case has been recorded about those persons who had delivered the ornaments to the assessee, that they have failed to prove their ownership to the ornaments and on that basis, the assessing authority has jumped to the conclusion that the said ornaments were belonging to the assessee and those findings have been affirmed by the CIT(A) and the Tribunal.

"We are aware that the Income-tax Appellate Tribunal is a fact-finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it this court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circumstances which required to be explained by the assessee, the assessee should be given an opportunity of doing so. On no account whatever should the Tribunal base its findings on suspicions, conjectures or surmises nor should it act on no evidence at all or on improper rejection of material and relevant evidence or partly on evidence and partly on suspicions, conjectures or surmises and if it does anything of the sort, its findings, even though on questions of fact, will be liable to be set aside by this court."

As regards the second contention, we are in entire agreement with the learned Solicitor-General when he says that the Income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of Section 23 of the Act, the Income-tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under Section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore High Court in the case of Seth Gurmukh Singh v. Commissioner of Income-tax, Punjab.

In this case we are of the opinion that the Tribunal violated certain fundamental rules of justice in reaching its conclusions. Firstly, it did not disclose to the assessee what information had been supplied to it by the departmental representative. Next, it did not give any opportunity to the company to rebut the material furnished to it by him, and lastly, it declined to take all the material that the assessee wanted to produce in support of its case. The result is that the assessee had not had a fair hearing. The estimate of the gross rate of profit on sales, both by the Income-tax Officer and the Tribunal, seems to be based on surmises, suspicions and conjectures. It is somewhat surprising that the Tribunal took from the representative of the department a statement of gross profit rates of other cotton mills without showing that statement to the assessee and without giving him an opportunity to show that that statement had no relevancy whatsoever to the case of the mill in question. It is not known whether the mills which had disclosed these rates were situate in Bengal or elsewhere, and whether these mills were similarly situated and circumstanced. Not only did the Tribunal not show the information given by the representative of the department to the appellant, but it refused even to look at the trunk load of books and papers which Mr. Banerjee produced before the Accountant Member in his chamber. No harm would have been done if after notice to the department the trunk had been opened and some time devoted to see what it contained. The assessment in this case and in the connected appeal; we are told, was above the figure of Rs. 55 lakhs and it was meet and proper when dealing with a matter of this magnitude not to employ unnecessary haste and show impatience, particularly when it was known to the department that the books of the assessee were in the custody of the Sub-Divisional Officer, Narayanganj. We think that both the Income-tax Officer and the Tribunal in estimating the gross profit rate on sales did not act on any material but acted on pure guess and suspicion. It is thus a fit case for the exercise of our power under Article 136.

"30.

The Tribunal has held that there is no evidence or material to link Varinder Sharma to the assessee and that findings have been recorded on mere suspicion, conjectures and surmises. The Tribunal has also held that the assessee, who accepted the gift for and on behalf of his daughters, was not privy to any information regarding the source of funds with Mr. B.P. Bhardwaj. One cannot be oblivious to the fact that such a large gift received from a foreign country is bound to raise suspicion but cannot disregard the fact that suspicion and doubt cannot replace proof or translate into reasons, much less reasons for invoking a deeming provision to hold that gifts represent the income of the assessee, particularly in the absence of relevant facts."

"...

12.

In Kulwant Rai (supra) interestingly the ruling of the Supreme Court in Dhakeswari Cotton Mills Ltd. (supra) was relied upon. The Supreme Court held that even though Income Tax Authorities including the Assessing Officer has unfettered discretion and not strictly bound by the rules and pleadings as well as materials on record and is legitimately entitled to act on the material which may not be accepted as evidence, nevertheless such discretion does not entitle them to make a pure guess and base an assessment entirely upon it without reference to any material or evidence at all.

13.

Given the above state of law - and this Court has no hesitation in so concluding, since the document seized was both undated and unsigned and even taken at face value did not lead to further enquiry on behalf of the AO, the ITAT's view which endorsed the findings of the CIT(Appeals) were well-founded and do not call for interference. The reliance placed upon Smt Urmila Gambhir (supra) in this Court's opinion is inapt because in that case there was other corroborative material for the income tax authorities to link the description of the transactions found in the said innocuous document seized with respect to other material. However, such inference cannot be drawn in this case because there is no other material. On the contrary the AO's acceptance and finalization of the assessment for 2007-08 on the basis of salary income of the assessee, undermines the entire findings with respect to the inferences drawn and the additions made, indicated above. The question of law urged, therefore, is not substantial and is answered against the revenue." (emphasis supplied)

In the case of CIT vs. Ved Prakash Choudhary: 169 Taxman 130, the facts before the Delhi High Court were that pursuant to a search at the residence of the assessee, two Memorandum of Understanding (MoUs) were recovered, which were entered into by assessee with 'R' and 'M' for purchase of agricultural land. In terms of the MoUs, assessee had paid certain amount as part consideration. However, before the assessing officer, the assessee denied having made any payment and further 'R' and 'M' also denied having received any amount. The assessing officer however concluded that denial was only to escape payment of tax liabilities and added that amount to income of the assessee as unexplained expenditure.

On appeal, the Commissioner (Appeals) as well as the Tribunal deleted the addition on the ground that there was not enough evidence to add that amount in the hands of the assessee, and it appeared from the facts that the property in question was eventually sold by 'R' and 'M' to 'D'.

The issue for consideration before the Hon'ble jurisdictional High Court was whether the addition was rightly deleted by the CIT(A)/ ITAT since there was no corroborative evidence to show that there was in fact transfer of money. The Court held the even if there was something wrong with some other transactions entered into, that would not give rise to an adverse inference insofar as the subject MoUs were concerned and dismissed the appeal preferred by the Revenue. The relevant observations of the Court are as under:

"10.

Section 132(4A) of the Act uses the expression 'it may be presumed'. It is not obligatory on the assessing authority to make a presumption. Even if a presumption is required to be made, then, as held in CIT v. S.M.S. Investment Corpn. (P.) Ltd. [1994] 207 ITR 364 (Raj.), the presumption is a rebuttable one and relates to a question of fact. While coming to this conclusion, the Rajasthan High Court relied upon an earlier decision rendered by it in CIT v. S.M.S. Investment Corpn. [1988] 173 ITR 393.

12.

Insofar as the present case is concerned, the Assessee had stated that in fact there was no transfer of money between him and Ravi Talwar and Madhu Talwar. On the other hand, Ravi Talwar and Madhu Talwar had denied receipt of any money from the assessee. In the fact of these denials, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. Both the Commissioner as well as the Tribunal have come to the conclusion that there was no such material on record.

13.

The Assessing Officer relied on certain other transactions entered into by the assessee with Ravi Talwar and Madhu Talwar for drawing a presumption in respect of the transfer of money, but the Tribunal rightly held that those were independent transactions and had nothing to do with the MoUs, which were the subject-matter of discussion. Even if there was something wrong with some other transactions entered into, that would not give rise to an adverse inference insofar as the subject MoUs are concerned.

14.

In our opinion, no substantial question of law arises.

15.

Dismissed" (emphasis supplied)

The above decision of the Delhi High Court has been affirmed by the Hon'ble Supreme Court by dismissing the Revenue's special leave petition (SLP No. CC-17329/ 2008) vide order dated 09.01.2009.

4.7

Further, I also find that no addition can be made merely on the basis of statement of the appellant without any corroborative evidence. The CBDT vide Instruction No. 286/2/2003 IT(Inv) has emphases that during search and seizure, there should be focus and concentration on collection of evidence of income and no attempt should be made to obtain confession as to the undisclosed income. Thus, CBDT has itself recognized the position that assessment of undisclosed income has been based upon evidence and not on statement. I also find that this issue was also dealt by Delhi High Court in the case of CIT v Harjeev Aggarwal [2016] 70 taxmann.com 95 (Delhi) wherein the Court held as under:-

"20.

. . The words "evidence found as a result of search" would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the Assessee during search operation.

4.8

In view of the above discussion and applying the legal position to the facts of the present case, I find that credits of Rs.89,50,000 received by the appellant from his father-in-law cannot be taxed under section 69A of the Act for the reason that these money were received by the appellant through proper banking channels and were recorded in the books of accounts of the appellant. Once the money was received in the bank account of the appellant i.e. the same stands recorded in the books of accounts of the appellant, the same cannot be taxed under section 69A of the Act until and unless the evidences are found indicating the cash payments made by the appellant to his father-in-law. I also find that though Sh. Prabhjot Singh Kohli was a non-resident in India and residing in Kuwait, still, he was earning rental income and capital gains in India which were declared by him in his ITR filed in India.

AY	Taxable Income declared	Rental receipts	Receipts on account of sale of property
2013-14	537,128	663,715
2014-15	547,750	782,500
2015-16	564,784	804,918
2016-17	5,08,740	7,20,750
2017-18	4,39,460	6,27,800
2018-19	5,59,945	7,54,000
2019-20	6,33,303	9,83,000
2020-21	6,89,085	9,83,950
2021-22	720,564	13,85,000
2022-23	5,23,915	7,48,450
2023-24	5,43,201	5,35,000	62,50,000
Total	62,67,875	89,89,083	62,50,000

4.9

On perusal of the above, I observe that Sh. Prabhjot Singh Kohli was having enough creditworthiness to advance gifts to the appellant. The appellant contended that it is outside the purview of the Indian Tax Authorities to verify the genuineness of cash deposits made by NRI in a foreign country. The appellant has explained the source of credits in his hands and the donor had acknowledge that he had given gift to his son in law.

Even though Sh. Prabhjot Singh Kohli is a non-resident in India and the AO was not able to draw the inference that the source of funds of Sh. Prabhjot Singh Kohli is not genuine. Further Sh. Prabhjot Singh Kohli had declared sufficient income in India to source the gifts made from Indian Bank account.

Hence, in view of the above, I find that entire credits received by the appellant from his father-in-law cannot be taxed under section 69A of the Act. Thus, what could be taxed is the amount of cash based on evidences found during the course of search which revealed that the appellant has generated income in cash which was subsequently sent to his father-in-law in lieu of banking credits sent by him through banking channels. Thus, I am of considered opinion that addition under section 69A of the Act could be sustained only to the extent of the amount which is emanating from the incriminating WhatsApp chats of the appellant showing cash payments made by the appellant to his father-in-law and around the same time, credits in the bank account have been received by the appellant from his father-in-law.

4.11

On perusal of the assessment order, I find that in respect of credits of Rs.89,50,000 received by the appellant from his father-in-law, evidences were found only in respect of certain payments:

Date	Amount (in Rs.)	Whether evidences found
07.04.2018	10,00,000	No evidence indicating that any cash payment of Rs.10,00,000 was made by the appellant to his father-in-law which has been received back in form of gift has been found and referred by the AO in the assessment order. In the absence of any evidence, these credits cannot be treated as unexplained money

		under section 69A of the Act.
06.07.2018	10,00,000	It is seen that an incriminating WhatsApp chat has been found showing that the cash was paid by the appellant to his father-in-law. The chat was dated 04.07.2018 which is reproduced below:
		The chat was further confronted to the appellant and he admitted that he acknowledged the same. Thereafter, on 06.07.2018, the same amount was received in the bank account of the appellant from his father in law in form of gift. Hence, this money is unexplained under section 69A of the Act.
11.07.2018	6,00,000	No evidence indicating that any cash payment of Rs.6,00,000 was made by the appellant to his father-in-law which has been received back in form of gift has been found and referred by the AO in the assessment order. In the absence of any evidence, these credits cannot be treated as unexplained money

under section 69A of the Act.
27.07.2018	35,00,000	No evidence indicating that any cash payment of Rs.35,00,000 was made by the appellant to his father-in-law which has been received back in form of gift has been found and referred by the AO in the assessment order. Further, in the assessment order, the AO has stated that the source of the Rs. 35,00,000/- remains unclear, as this balance appears to have been carried forward from the previous year. In this regard, I find that the appellant has explained the source of credits in his hands and he is not liable to explain the source of funds in the hands of the donor. Further, Sh. Prabhjot Singh Kohli is a non-resident in India and his source of funds cannot be enquired by the AO. Had AO found any evidence that this gift of money pertains to cash sent back by the appellant, in that case, this amount could have been taxed under section 69A of the Act. However, this is not the case. Thus, in the absence of any evidence, these credits cannot be treated as unexplained money under section 69A of the Act.
17.09.2018	5,00,000	No evidence indicating that any cash payment of Rs.5,00,000 was made by the appellant to his father-in-law which has been received back in form of gift has been found and referred by the AO in the assessment order. Further, in the assessment order, the AO has stated that the amount of Rs. 5,00,000/-

		transferred by Shri Prabhjot Singh Kohli was moved from his another account, but the assessee has not provided any narration or justification for this transfer. In this regard, I find that the appellant is not required to explain the reason of transfer of funds from one account to another account by Shri Prabhjot Singh Kohli. The appellant has explained the source of credits in his hands and he is not liable to explain the source of funds in the hands of the donor. Further, Sh. Prabhjot Singh Kohli is a non-resident in India and his source of funds cannot be enquired by the AO. Had AO found any evidence that this gift of money pertains to cash sent back by the appellant, in that case, this amount could have been taxed under section 69A of the Act. However, this is not the case. In the absence of any evidence, these credits cannot be treated as unexplained money under section 69A of the Act.
12.10.2018	15,00,000	It is seen that an incriminating WhatsApp chat has been found showing that the cash was paid by the appellant to his father-in-law. The chat was further confronted to the appellant and he admitted that he acknowledged the same. Thereafter, on 12.10.2018, the same amount was received in the bank account of the appellant from his father in law in form of gift. Hence, this money is unexplained under section 69A of the Act

20.10.2018	5,00,000	No evidence indicating that any cash payment of Rs.5,00,000 was made by the appellant to his father-in-law which has been received back in form of gift has been found and referred by the AO in the assessment order. In the absence of any evidence, these credits cannot be treated as unexplained money under section 69A of the Act.
21.02.2019	2,00,000	No evidence indicating that any cash payment of Rs.2,00,000 was made by the appellant to his father-in-law which has been received back in form of gift has been found and referred by the AO in the assessment order. In the absence of any evidence, these credits cannot be treated as unexplained money under section 69A of the Act.
21.02.2019	1,50,000	No evidence indicating that any cash payment of Rs.1,50,000 was made by the appellant to his father-in-law/mother in law which has been received back in form of gift has been found and referred by the AO in the assessment order. In the absence of any evidence, these credits cannot be treated as unexplained money under section 69A of the Act.
TOTAL	89,50,000

4.12

I also rely upon the decision of Delhi High Court in the case of CIT vs. Mayawati: 338 ITR 563 wherein the Court held that where there is no evidence on record to prove that the assessee has favoured the donor in any manner whatsoever by acquiring the gifts, no addition can be made. It was also held that the capacity of any person does not mean how much they earn monthly or annually, but the term capacity has aided term and that can be perceived by how wealthy he is. The relevant extracts of the decision of the High Court are reproduced as under:

"All the donors appeared before the Department, submitted material including affidavits on oath, confirms the gifts made, established their old relations with the assessee and proved their capacity to make the gifts. We have noted that in earlier years also they had made gifts to the assessee and her family members, which were accepted by the Revenue. We have also noted that two gifts made by Sh.Ajay Aggarwal and Sh.O.P.Khadaria, Advocate were of Rs.10 lacs and Rs.1 lac respectively have been accepted by the Department. The donors are persons of sufficient means. The assessee has fully discharged her legal obligations by disclosing the identity of all the donors. Further, donors have proved their genuineness and capacity to make a gift. All assessee as well as the donors had appeared before the Registrar and the gifts are duly registered. All gifts are absolute and without any lien of anyone. There is no evidence on record to prove that the assessee has favoured the donor in any manner whatsoever by acquiring the gifts in question. The capacity of any person does not mean how much they earn monthly or annually, but the term capacity has aided term and that can be perceived by how wealthy he is. All the formalities, as per law are met by the assessee and donors as well. All the donors have admitted that they are great admirer of the assessee as she is working for the upliftment of poor people."

20.

In the instant case, though the AO has stated as a general proposition of law that creditworthiness and identity of the donor and the genuineness of the gift, apart from establishing the occasion are relevant, no specific finding was rendered by him that the assessee has not established the identity and relationship of the donor with him. The AO has primarily misdirected himself in thinking that the main ingredient for a valid gift is proof of existence of occasion. This demonstrably is a flawed reason as the same is in the teeth of Section 56(2)(v(a) of the Act, as discussed above.

21.

The further observation of the AO that the assessee appeared to have opened the bank account only for the purpose of receiving cash in the guise of a gift, is also flimsy. When the donor herself has given a confirmation letter clearly stating therein that she has transferred the amount of Rs.73,00,000/- to the account of the assessee and further declaring that she gave the said gift out of her natural love and affection towards her nephew, the AO ought not to have entertained further doubts. If for facilitating receipt of a gift the assessee has opened an account, we do not find anything wrong in that. In our opinion, the whole approach of the AO is wholly perverse which cannot be sustained. Equally, the reasons assigned by the two appellate bodies confirming the order of the AO are also perverse.

22.

The findings of the CIT(A) that gifts are traditional in nature, that they are given in functions like marriages etc., that there was no such occasion warranting receipt of gift from Nirmala to the assessee, and that it is very odd to note that the entire amount received from her daughter has been diverted to the assessee as a gift without any consideration, look to us to be empty sermons as the CIT (A) evidently judged the conduct of the parties from his personal perception, which is wholly impermissible.

23.

When the Act itself does not envisage any occasion for a relative to give a gift, it is well-nigh impermissible for any authority and even for that matter for the Court to import the concept of occasion and develop a theory based on such concept. The donor being no other than the assessee's own maternal aunt, is a 'relative' as defined under the explanation to Section 56(2)(v) of the Act and in the light of the plea of the assessee that she was brought up by the assessee's parents, and her daughters having already been married off and in a well-to-do position, it cannot be said that such a gift falls beyond "human probability" test as quite often applied by the Courts. Hence, it is not permissible for the AO to judge the conduct of the donor sitting in his arm chair."

"10.

On careful consideration of the above rival submissions, I am of the view that the assessee has submitted affidavit of his mother stating the clear facts that she is holding PAN, but had not filed the return of income during the period under consideration. The Id. Counsel submitted that since her income was lesser than the taxable limit, therefore, she was not filing the return of income for relevant AY 2014-15. In para 3 of the affidavit, Smt. Angoori Devi clearly stated that she had paid an amount of Rs.5 lakh to Shri Rajesh Kumar Gupta for the purpose of Europe tour during AY 2014-15 which was paid out of her total savings. As per the affidavit, Smt. Angoori Devi is having PAN, but, had not filed the return of income as the income was less than the taxable limit. However, being an old lady, if she has gifted some amount to her son for Europe tour, then, the same cannot be disputed or disregarded on the basis of surmises and conjectures. Therefore, ground No.2 of the assessee is allowed. Consequently, the AO is directed to delete the addition."

57.

“However, there are two new issues in the appeal of the Revenue wherein Revenue has challenged the deletion of addition of INR 1,16,90,723/- on account of cash payment for construction of property and challenged the deletion of addition of INR 51,80,000/- made u/s 56(2)(viib) of the Act towards the valuation of shares of M/s. Luxerati Retail Pvt. Ltd.

58.

With regard to deletion of addition of INR 1,16,90,723/- made on unaccounted cash payment for construction of property, the AO in para 17.1 of the order observed that the search was also carried out simultaneously at the business premises of ENN V ENN Designs Pvt. Ltd. at 2798/2798A, Sushant Lok Road, Block-C, Phase-I, Sector-43, Gurgaon, wherein certain soft data was found with respect to the construction, architectural and other design related work of various properties which includes the digital evidences of the construction of immovable properties belonged to the assessee company. AO based on such documents, alleged that there were cash payments with respect to the construction of property situated at C-2604, Sushant Lok 1, Gurgaon which were not recorded in the books of accounts of the assessee and therefore, addition of INR 1,16,90,723/- was made being the difference of amount stated in Excel sheet and amount recorded in the books of accounts of the assessee company u/s 69A/115BBE of the Act which was deleted by ld. CIT(A).

59.

Against this, Revenue is in appeal before the Tribunal. During the course of hearing Ld. CIT DR vehemently supported the order of the AO and submits that there were evidences were found as a result of search at the business premises of the company to whom entire civil construction/architectural /interior work was awarded by the assessee company for the property situated at t C-2604, Sushant Lok 1, Gurgaon. Ld. CIT DR further submits that the AO has relied upon the Excel Sheet found from the possession of Directors of the Contractor company wherein entries of payment in cash were found recorded. It is submitted by Ld. CIT DR that Ld. CIT(A) has deleted the addition by accepting the contention of the assessee that no payment whatsoever, was made during the year under appeal and the Excel Sheet do not contain any dates etc. Ld. CIT DR submits that the additions are based on the admission of one of the employee of Contractor as well as statement of the accountant of the assessee and therefore, requested for the restoration of the AO’s order.

60.

On the other hand, Ld.AR for the assessee vehemently supported the order of Ld. CIT(A) and submits that Excel Sheet does not contain any date/mode of payment/particulars of the parties or the material for which alleged payments were made. It is further submitted by Ld.AR that the total work was awarded in INR 2 crores in terms of agreement dated 27.11.2018 and no payment whatsoever, was made during the year under appeal. He further submits that none of the paper contained any date and all the figure are in round figures which further suggests that they were mere estimations for which discussions were continued between the management of the assessee company and the contractor. Ld.AR submits that no additions on the basis of assumptions or presumption without any corroborative evidences could be made. He therefore, submits that Ld. CIT(A) has rightly deleted the additions which order deserves to be uphold. He prayed accordingly.

61.

Heard the contentions of both the parties at length and perused the material available on record. It is observed that there was certain Excel Sheets found in digital data from the possession of the company Enn V ENN Designs Pvt. Ltd. who were awarded work for civil construction, architectural and interior design of the property owned by assessee situated at C-2604, Sushant Lok 1, Gurgaon. It is observed that the extract of Excel Sheet found from various digital data as reproduced in the assessment order at pages 196 to 208, all the figures noted therein are in round figures and at various stages. It is further observed that nowhere in the said documents, it is observed that any cash payments were made by the assessee to the contractor in addition to the amount which were recorded in the books of accounts. Ld. CIT DR appreciated these facts and deleted the additions made by AO by making following observing in para 8.1 to 8.9 of the order:-

8.4.

Further, I also note that the said excel sheet nowhere mentions the word 'Cash' and the AO has merely presumed based on surmises, guesswork and conjectures that cash was paid by the appellant-company. There can be no presumption that the assessee has paid any unaccounted cash- the same has to be established as a matter of fact. The AO has not highlighted any credible evidence to substantiate actual payment of cash by the appellant. Hence, I find that the assessee cannot on suspicion and surmises be deemed to have made any cash payment to Enn V Enn Designs Pvt. Ltd. The apparent is the real unless the contrary is proved and the onus to prove the contrary is on the person who alleges so [refer CIT vs. Daulat Ram Rawatmull: [1973] 87 ITR 349 (SC)]. The assessing officer had failed to discharge his burden/ onus in this regard. The assessing officer cannot first make certain assumption and thereafter apply the deeming provisions based on such assumption.

8.5.

It is also settled law that suspicion, howsoever, strong cannot take place of proof and that assessment under the Act has to be made on the basis of material/evidence and not on the basis of assumptions/presumptions:

- J.J. Enterprises v. CIT 254 ITR 216 (SC).

- Uma Charan Shaw & Bros. Co. v. CIT: 37 ITR 271 (SC)

- Omar Salay Mohammad Sait vs. CIT: 37 ITR 151(SC)

- DhirajlalGirdharilal v CIT: 26 ITR 736 (SC)

- Dhakeshwari Cotton Mills Ltd. v CIT: 26 ITR 775 (SC)

- Assam Tea Co. V. ITO: 92 ITD 85 (Asr.) (SB)

- Faqir Chand Chaman Lal v. ACIT: (2004) 1 SOT 914 (Asr.) (Appeal dismissed by P&H High Court in 262 ITR 295 and SLP dismissed by SC in 268 ITR)

- CIT V. Paras Cotton Co.: 288 ITR 211 (Raj.)

8.6.

Further, while adjudicating the previous Grounds of Appeal, I have already discussed in detail that no addition could be made on the basis of conjectures, suspicion and surmises [Lalchand Bhagat Ambica Ram vs. CIT: 37 ITR 288 and Others].

8.7.

I also rely upon the decision of Hyderabad Bench of the Tribunal in the case of Sri Tarun Kumar Goyal vs. ACIT: ITA No. 456/Hyd/20. In that case, the Tribunal held that no addition could be made merely on the basis of dumb excel sheets containing rough notings and jottings. Extracts of the decision of the Hon'ble Tribunal are reproduced as under:

13.

Lastly comes the crucial issue as to whether the impugned seized material / 'Excel' sheet (not mentioning the assessees' names) forms a dumb document or not. We make it clear that the department has failed to corroborate the impugned seized document indicating assessee's alleged on money payment over and above the sale price itself. All it has done is to rely on their father's name only. It is nowhere clear as to whether it is an alleged document forming part of the books of account maintained in the regular course of business either by the vendor or vendee side. All it contains therefore is rough notings and jottings only. This tribunal co-ordinate bench's decision Nishan Constructions Vs. ACIT ITA No.1502/Ahd/2015; after considering the hon'ble apex court's landmark decision in Common Cause, Vs. Union of India (2017) 77 taxmann.com 245 (SC) and CBI Vs. V.C.Shukla (1998) 3 SCC 410 (SC) holds that such loose sheets deserves to be treated as a dumb documents only since not revealing full details about the dates containing lack of further particulars and therefore, ought not to be made basis of an addition. Similar other judicial precedents ACIT Vs. Layer Exports P.Ltd., (2017) [184 TTJ 469] (Mumbai) & ITO Vs. Kranti Impex Pvt. Ltd., ITA No.1229/Mum/2013, dt.28-02-2018 (dealing with a seized document seized not either bearing the taxpayer's name or signature). Shri Neeraj Goyal Vs. ACIT, ITA No.5951/Del/2017, dt.21-03-2018, (Del) (2012) 23 taxmann.com 269] Nagarjuna Construction Co. Ltd., Vs. DCIT, CIT Vs. S.M.Agarwal, [293 ITR 43], CIT Vs. Shri Girish Chaudhary (2008) 296 ITR 619 (Del) also echo the very principle. We accordingly hold that the impugned addition of on-money payment made in both these assessees' hands on the basis of a mere dumb document and not corroborated by any other evidence is not sustainable. We thus direct to delete the impugned identical addition forming subject matter of adjudication in both these cases."

8.8.

In view of the above, the excel sheet found from the premises of Enn V Enn Designs Pvt. Ltd. nowhere establishes that any cash payment was made by the appellant to that company in FY 2021-22. The said sheet appears to be a draft estimate as certain columns holds the word 'Discussion'. Also, it nowhere mentions that any cash payment was to be made by the appellant. Also, the said sheet is undated, unsigned and even the author of the sheet is unknown. Thus, in the absence of any credible evidence, the AO was not correct in making addition on the ground that the appellant company had made cash payment to Enn V Enn Designs Pvt. Ltd.

62.

From the perusal of the observations of Ld. CIT(A) and the conclusion drawn, it is observed that AO has made the additions solely on the basis of so-called Excel Sheets wherein amounts stated to have been recorded on estimated basis without bringing on record any corroborative material to hold that these amounts are actually incurred by the Contractor as well as paid in cash by the assessee. Further, no inquiry was made from the Contractor with respect to the receipt of such cash from the assessee. Further, if the AO has any doubts about the cost of construction declared by the assessee of the subject property, he could have referred the matter for valuation before the District Valuation Officer which has not been done in the instant case. In view of these facts, we are of the view that without having any corroborative evidences in support of the so-called estimation, solely for the figures found noted in the Excel Sheet, no addition could be made and therefore, we uphold the observations of Ld. CIT(A). Accordingly, Revenue appeal fails on this issue.”

Ground no. 3

5.1

I have carefully considered submissions filed by the appellant and Assessment Order. In this ground of appeal, the appellant has challenged addition of Rs. 16,18,460/- made by the AO on account of cash payments made for construction of immovable property situated at C-213, Sushant Lok-1, Gurgaon. The AO has stated that the cash amount was regularly paid by the appellant to M/s ENN V ENN Designs Pvt. Ltd. for the construction of various projects and has relied upon some excel sheet found from the residential and office premises of M/s Enn V Enn Designs Pvt Ltd. on the basis of which the AO inferred that cash payment was made.

5.2

In this regard, the appellant has contended that assessee has been entered in to a construction contract with M/s Enn V Enn Designs Pvt Ltd for constructing a building on property no. C-213, Sushant Lok-1, Gurgaon, Haryana on 27.11.2018 for total consideration of Rs. 1,02,42,236/-. It was further submitted that no expenditure on construction of premises C-213, Sushant Lok-I, Gurgaon, Haryana was incurred during the period under consideration. Further, as regard the excel sheet, it was submitted that the aforesaid excel sheet does not reflect the date of payment, mode of payment, and much less particulars of party / material in respect of which alleged payment may have been made by M/s Enn V Enn Designs Pvt Ltd on account of construction carried on at the premises of assessee. It was submitted that neither the amounts recorded in the excel sheet are further supported by any documentary evidence.

5.3

I have considered the submissions of the appellant. I find that the AO has made the addition on the basis of excel sheet found from the residential and office premises of M/s Enn V Enn Designs Pvt Ltd. On perusal of the excel sheet, I find that there is no noting in the said excel sheet that the assessee has made any cash payment in the FY 2018-19. The excel sheet does not have any dates, no name of the person and appears to be an estimate. The excel sheet does not contain the prices for many works to be performed and at some places the term "discussion" was mentioned, for instance, Elevation, Terrace, Terrace Toilet etc were pending for discussion. Thus, I find that the excel sheet does not conclusively prove that the amounts reflecting therein represents the expenditure incurred over and above the agreed amount under contract.

Further, I also note that the said excel sheet nowhere mentions the word 'Cash' and the AO has merely presumed based on surmises, guesswork and conjectures that cash was paid by the appellant. There can be no presumption that the assessee has paid any unaccounted cash- the same has to be established as a matter of fact. The AO has not highlighted any credible evidence to substantiate actual payment of cash by the appellant. Hence, I find that the assessee cannot on suspicion and surmises be deemed to have made any cash payment to Enn V Enn Designs Pvt. Ltd. The apparent is the real unless the contrary is proved and the onus to prove the contrary is on the person who alleges so [refer CIT vs. Daulat Ram Rawatmull: [1973] 87 ITR 349 (SC)]. The assessing officer had failed to discharge his burden/ onus in this regard. The assessing officer cannot first make certain assumption and thereafter apply the deeming provisions based on such assumption.

It is also settled law that suspicion, howsoever, strong cannot take place of proof and that assessment under the Act has to be made on the basis of material/evidence and not on the basis of assumptions/presumptions:

- J.J. Enterprises v. CIT 254 ITR 216 (SC).

- Uma Charan Shaw & Bros. Co. v. CIT: 37 ITR 271 (SC)

- Omar Salay Mohammad Sait vs. CIT: 37 ITR 151(SC)

- Dhirajlal Girdharilal v CIT: 26 ITR 736 (SC)

- Dhakeshwari Cotton Mills Ltd. v CIT: 26 ITR 775 (SC)

- Assam Tea Co. V. ITO: 92 ITD 85 (Asr.) (SB)

- Faqir Chand Chaman Lal v. ACIT: (2004) 1 SOT 914 (Asr.) (Appeal dismissed by P&H High Court in 262 ITR 295 and SLP dismissed by SC in 268 ITR)

- CIT V. Paras Cotton Co.: 288 ITR 211 (Raj.)

The the Supreme Court in the case of Lalchand Bhagat Ambica Ram vs. CIT: 37 ITR 288 held that no addition could be made on the basis of conjectures, suspicion and surmises. In this case, since the circumstances relied upon by the assessing officer were found to be matters of pure conjecture, suspicion and surmises, the addition made in such circumstances was held to be unsustainable.

The Supreme Court in the case of 37 ITR 271 (SC) Uma Charan Shaw & Bros. Co. v. CIT held 'Taking into consideration the entire circumstances of the case, we are satisfied that there was no material on which the Income-tax Officer could come to the conclusion that the firm was not genuine. There are many surmises and conjectures, and the conclusion is the result of suspicion which cannot take the place of proof in these matters.'

To the same effect is the decision of Supreme Court in the case of Omar Salay Mohamed Sait vs. CIT [1959] 37 ITR 151 (SC) wherein the Hon'ble Court again held that on no account whatever should the Tribunal base its findings on suspicions, conjectures or surmises. The relevant extracts of the order of the Supreme Court are reproduced as under:

"We are aware that the Income-tax Appellate Tribunal is a fact finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it this court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circumstances which required to be explained by the assessee, the assessee should be given an opportunity of doing so. On no account whatever should the Tribunal base its findings on suspicions, conjectures or surmises nor should it act on no evidence at all or on improper rejection of material and relevant evidence or partly on evidence and partly on suspicions, conjectures or surmises and if it does anything of the sort, its findings, even though on questions of fact, will be liable to be set aside by this court."

The additions made on mere presumptions could not be sustained and there must be something more than mere suspicion to support the addition as per decision of the five judges of the Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills v. CIT: 26 ITR 775. In that case, the Supreme Court held that the ITO is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. The Court held that on the facts of the case, the ITO and the Appellate Tribunal erred in estimating the gross profit rate on sales of the assessee without any material and on pure guess and suspicion. The pertinent observations of the apex Court are reproduced hereunder:

"...

As regards the second contention, we are in entire agreement with the learned Solicitor-General when he says that the Income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of Section 23 of the Act, the Income-tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under Section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore High Court in the case of Seth Gurmukh Singh v. Commissioner of Income-tax, Punjab.

In this case we are of the opinion that the Tribunal violated certain fundamental rules of justice in reaching its conclusions. Firstly, it did not disclose to the assessee what information had been supplied to it by the departmental representative. Next, it did not give any opportunity to the company to rebut the material furnished to it by him, and lastly, it declined to take all the material that the assessee wanted to produce in support of its case. The result is that the assessee had not had a fair hearing. The estimate of the gross rate of profit on sales, both by the Income-tax Officer and the Tribunal, seems to be based on surmises, suspicions and conjectures. It is somewhat surprising that the Tribunal took from the representative of the department a statement of gross profit rates of other cotton mills without showing that statement to the assessee and without giving him an opportunity to show that that statement had no relevancy whatsoever to the case of the mill in question. It is not known whether the mills which had disclosed these rates were situate in Bengal or elsewhere, and whether these mills were similarly situated and circumstanced. Not only did the Tribunal not show the information given by the representative of the department to the appellant, but it refused even to look at the trunk load of books and papers which Mr. Banerjee produced before the Accountant Member in his chamber. No harm would have been done if after notice to the department the trunk had been opened and some time devoted to see what it contained. The assessment in this case and in the connected appeal; we are told, was above the figure of Rs. 55 lakhs and it was meet and proper when dealing with a matter of this magnitude not to employ unnecessary haste and show impatience, particularly when it was known to the department that the books of the assessee were in the custody of the Sub-Divisional Officer, Narayanganj. We think that both the Income-tax Officer and the Tribunal in estimating the gross profit rate on sales did not act on any material but acted on pure guess and suspicion. It is thus a fit case for the exercise of our power under Article 136. ..." (emphasis supplied)

In this regard, I also draw support from the judgement of Hon'ble Punjab and Haryana High Court in the case of CIT vs. Jawaharlal Oswal and Ors. 382 ITR 453 (P&H) which in Para 30 held as under:

"30.

The Tribunal has held that there is no evidence or material to link Varinder Sharma to the assessee and that findings have been recorded on mere suspicion, conjectures and surmises. The Tribunal has also held that the assessee, who accepted the gift for and on behalf of his daughters, was not privy to any information regarding the source of funds with Mr. B.P. Bhardwaj. One cannot be oblivious to the fact that such a large gift received from a foreign country is bound to raise suspicion but cannot disregard the fact that suspicion and doubt cannot replace proof or translate into reasons, much less reasons for invoking a deeming provision to hold that gifts represent the income of the assessee, particularly in the absence of relevant facts."

In the case of CIT vs. Ved Prakash Choudhary: 169 Taxman 130, the facts before the Delhi High Court were that pursuant to a search at the residence of the assessee, two Memorandum of Understanding (MoUs) were recovered. which were entered into by assessee with 'R' and 'M' for purchase of agricultural land. In terms of the MoUs, assessee had paid certain amount as part consideration. However, before the assessing officer, the assessee denied having made any payment and further 'R' and 'M' also denied having received any amount. The assessing officer however concluded that denial was only to escape payment of tax liabilities and added that amount to income of the assessee as unexplained expenditure.

On appeal, the Commissioner (Appeals) as well as the Tribunal deleted the addition on the ground that there was not enough evidence to add that amount in the hands of the assessee, and it appeared from the facts that the property in question was eventually sold by 'R' and 'M' to 'D'.

The issue for consideration before the Hon'ble jurisdictional High Court was whether the addition was rightly deleted by the CIT(A)/ ITAT since there was no corroborative evidence to show that there was in fact transfer of money. The Court held the even if there was something wrong with some other transactions entered into, that would not give rise to an adverse inference insofar as the subject MoUs were concerned and dismissed the appeal preferred by the Revenue. The relevant observations of the Court are as under:

"10.

Section 132(4A) of the Act uses the expression 'it may be presumed'. It is not obligatory on the assessing authority to make a presumption. Even if a presumption is required to be made, then, as held in CIT v. S.M.S. Investment Corpn. (P.) Ltd. [1994] 207 ITR 364 (Raj.), the presumption is a rebuttable one and relates to a question of fact. While coming to this conclusion, the Rajasthan High Court relied upon an earlier decision rendered by it in CIT v. S.M.S. Investment Corpn. [1988] 173 ITR 393.

12.

Insofar as the present case is concerned, the Assessee had stated that in fact there was no transfer of money between him and Ravi Talwar and Madhu Talwar. On the other hand, Ravi Talwar and Madhu Talwar had denied receipt of any money from the assessee. In the fact of these denials, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. Both the Commissioner as well as the Tribunal have come to the conclusion that there was no such material on record.

13.

The Assessing Officer relied on certain other transactions entered into by the assessee with Ravi Talwar and Madhu Talwar for drawing a presumption in respect of the transfer of money, but the Tribunal rightly held that those were independent transactions and had nothing to do with the MoUs, which were the subject-matter of discussion. Even if there was something wrong with some other transactions entered into, that would not give rise to an adverse inference insofar as the subject MoUs are concerned.

14.

In our opinion, no substantial question of law arises.

15.

Dismissed" (emphasis supplied)

13.

Lastly comes the crucial issue as to whether the impugned seized material / 'Excel' sheet (not mentioning the assessees' names) forms a dumb document or not. We make it clear that the department has failed to corroborate the impugned seized document indicating assessee's alleged on money payment over and above the sole price itself. All it has done is to rely on their father's name only. It is nowhere clear as to whether it is an alleged document forming part of the books of account maintained in the regular course of business either by the vendor or vendee side. All it contains therefore is rough notings and jottings only. This tribunal co-ordinate bench's decision Nishan Constructions Vs. ACIT ITA No.1502/Ahd/2015; after considering the hon'ble apex court's landmark decision in Common Cause, Vs. Union of India (2017) 77 taxmann.com 245 (SC) and CBI Vs. V.C.Shukla (1998) 3 SCC 410 (SC) holds that such loose sheets deserves to be treated as a dumb documents only since not revealing full details about the dates containing lack of further particulars and therefore, ought not to be made basis of an addition. Similar other judicial precedents ACIT Vs. Layer Exports P.Ltd., (2017) [184 TT] 469] (Mumbai) & ITO Vs. Kranti Impex Pvt. Ltd., ITA No.1229/Mum/2013, dt.28-02-2018 (dealing with a seized document seized not either bearing the taxpayer's name or signature). Shri Neeraj Goyal Vs. ACIT, ITA No.5951/Del/2017, dt.21-03-2018, (Del) (2012) 23 taxmann.com 269] Nagarjuna Construction Co. Ltd., Vs. DCIT, CIT Vs. S.M.Agarwal, [293 ITR 43], CIT Vs. Shri Girish Chaudhary (2008) 296 ITR 619 (Del) also echo the very principle. We accordingly hold that the impugned addition of on-money payment made in both these assessees' hands on the basis of a mere dumb document and not corroborated by any other evidence is not sustainable. We thus direct to delete the impugned identical addition forming subject matter of adjudication in both these cases."

ITA No.5652/Del/2025 for Assessment Year 2021-22

Unexplained money, etc.

69A. “Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.”

ITA No.5653/Del/2025 [Assessee’s appeal] &

ITA No.8002/Del/2025 [Revenue’s appeal]

[Assessment Year : 2023-24]